The Need for a Real Domestic Alternative Energy Policy in the USA

Alternative energy (or renewable energy) is a new manufacturing industry paradigm that is in its infancy. However, the discussion is not new, and it looks as if the United States has positioned itself to be behind history on what can be a very promising industry for a stumbling economy. After the oil shortages in the 70′s, government officials began discussing energy policy as a matter of national security, but this misses the point of a globally competitive economic world. It was too early then to begin thinking that China could out-invest the United States in order to produce an alternative energy manufacturing industry. Yet, now we must come to terms that the free market ideology is disallowing America from utilizing tried and true techniques of infant industry construction as laid out by Alexander Hamilton, the first Secretary of the Treasury of the United States. This article will attempt to show that what is needed now and what will aid in rebuilding the economy, is a change in paradigm that constructs energy companies under regulatory principles so that America will remain competitive in a rapidly changing economic climate.

Let us begin with the thought process of Alexander Hamilton in order to frame the argument of building a new industry within the United States correctly in order to compete on the global market. The gist of the argument is that in order for new industries to start up losses have to be guaranteed by the government in order for industry, and at the time the merchant class, to take the risk of investing to be competitive. Governments are not businesses and have properties more like non-profit organizations. They have the ability to hold and maintain debt even above yearly revenue or GDP in order to stimulate economic activity. Hamilton called this the infant industry argument, and it was due to the fact that if America wanted to compete it had to be able to safeguard the industries it thought would be best positioned against other countries who were enacting similar policies. The free trade argument against this is to an extent quite ridiculous, because what person would not want their initial investments guaranteed. And also this does not mean supporting bail-outs of large banking institutions who are not a new industry, but only for infant industries. Nor does it mean remaining with centralized power plants that lose 6.5-7.5% of energy due to long distance transmission. Those things would be fallacious to the argument. What it means is that the government has a duty to utilize tax revenue in order to secure American economic competitiveness and not, to use the words of Ha-Joon Chang, “kicking away the ladder”, at such a critical economic moment in American history.

So, in America at the moment according to the Renewable Energy Status Report, in 2010 10.9% of domestic primary energy production was renewable with a 5.6% increase from 2009, which shows growth and also a demand in the market. As well, pointed out by Michael Heiman and Barry Solomon, “renewable energy is typically more labor-intensive per dollar invested in the construction phase and cheaper to operate.” Further along they also show that there exists a difference between saying and doing, where 40 percent say they would pay more for Green Energy and only 1 percent actually do. This brings us back to the argument of being willing to take a loss at the outset, having a cheaper price in order to produce clients until the price can come down because of the aggregate demand. The problem has been in states who have enacted market reform instant of infant industry creation policies to produce this change, such as New Jersey, did not move towards renewable energy and the market reform only raised the rates on clients. So, obviously business is not willing to take the risk and therefore government regulation, investment, and policy is needed in order to make these risky jumps onto new frontiers.

This had led to something quite astounding and should be ridiculous to every American, that China now leads the world in installation of wind turbines and solar thermal systems. With a $211 billion investment in 2010 for renewable energy, it is on the rise and should not be discounted to have conversations about drilling in the Gulf of Mexico or whether or not the EPA should remain. There is a reason T Boone Pickens is investing heavily in wind farms, and another reason why they aren’t going to Texas; poor State and Federal Government policy. Companies do not do externalities or infrastructure, and when they do it is with government support and money, so without the transmission lines, Pickens sent his turbines to Canada. The overemphasis on tax cuts as the only way to spurn private business has become a mantra that is corrosive and harming American capabilities to deal properly with the economic crisis and get people back to work. As stated before, renewable energy is labor intensive and we have an employment rate at 16-17% if we include discourage and part time workers. That’s talking jobs.

To end this out, what we have in America is a political discourse and ideology that disallows proper economic domestic policy. Alternative energy is a boom industry that needs government stimulus in order to cover the initial losses that would be incurred by private industry. All the ingredients exist to utilize this industry to bring back manufacturing to America, a sector that has been rapidly losing jobs. In 2007 prior to the recession 217,000 manufacturing jobs were lost, a trend that is continued with more outsourcing every year. This isn’t because labor was priced out of the market, it is because high-technology has no domestic economic policy to support large-scale investment and construction. The argument is against both sides of the aisle in congress and the executive who have lacked the political will against the onslaught of propaganda. Alternative energy will not kill the petroleum industry, as long you have heard of something called plastic, nor will it be some socialist evil over-centralizing, but it will allow America to rebuild an economy that hangs on the edge of a cliff.

According to EPIA, Inner Mongolia’s installed wind power capacity approaches 3.5 gigawatts, and currently nearly one-third of that is sitting idle. The remaining two-thirds capacity is supplied by turbines that run erratically, shutting off and on according to demand.

National Development and Reform Commission (NDRC) data illustrates the seriousness of idle wind power capacity. From January to September 2009, NDRC said, wind farms with generating capacity of at least 6 megawatts produced 18.2 billion kwh of electricity nationwide – up 117 percent over the same period 2008.

But that was only about 0.45 percent of all the electricity churned out by China’s major power plants, and was significantly less than wind power’s proportion of total installed capacity, which is 1.15 percent.

Another article that points out that admiration for china as a renewable example is misplaced.

Kevin Bullis at Technology Review goes into Freidmanesque rapture over the powers of the enlightened autocracy of the Middle Kingdom, claiming that “(t)he country is staking a claim as the global center of clean energy, with ambitious policies that are helping to drive both the manufacturing of solar panels and wind turbines and the development of large markets for renewable energy.”

As I did yesterday, I have to refer Bullis and everyone else to the recent report from the Institute for Energy Research.

To sum up: China is trying mightily to catch up, but they are way behind the US in the renewable energy race.

Indeed, for all the show piece wind farms and solar installations, the Chinese are dedicated to King Coal for the electricity needs. They plan on building 500 coal fired electrical plants over the next ten years – on average, one per week.

This is an intelligently written article, but skirts over a major problem: If we decide to have any industrial/energy policy, who decides? And given our political system, does not that lead to corruption? See ethanol.

I also disagree with one of the premises of the article, and that is that energy is not a national security issue.

When the bulk of oil is locked up by thug states (Russia, Mexico, Venezuela, Nigeria, Saudi Arabia, Iraq, Iran, P.U.), we are but a thug action, or government meltdown, away from a crisis.

I would prefer more-reliable sources of energy, and domestic if possible.

I guess I prefer a simple tax that supports domestic energy, and let it go at that. The venture capitalists seem to have plenty of money.

1.) I definitely agree with the Pickens comment, that is the guy that figured we should pay for air someday. He states this in an interview for the movie Blue Gold. Yet, it was just an example and I would much rather worker collectives operating with the money as a loan rather than any form of actual control.

2.) The last part of 1.) leads into the point against the statements about China. We are not China, nor would we commit a command form of government policy if done right. Government policy does not equate automatically to socialism or command economy. If you think so then I say let us stop the government policy against stealing a TV, because you know that is “socialism/command” and if he/she cant secure his/her goods he/she shouldn’t be able to sell them.

3.) I presuppose in the least a republic at maximum a democracy. I would hope that citizens want to be informed but are led astray a lot by lunatics on the television and in their newspapers. I understand it can all go wrong, but it is one part I would not claim as everything.

4.) I would agree that it is National Security, but I am sorry I can not agree with calling everyone else a thug and not us as well. I think the list is quite long on American bullying. Also, Saudi Arabia isn’t going anywhere without us, Mexico as well. Venezuela is not going to move without permission from other countries in South America, because really they just want an end to the Monroe Doctrine. Lucky we built that the largest embassy in the world in Iraq, and Iran would be quite happy if we lifted the sanctions to leave us well alone. We should stop labeling things as thug this and thug that without also taking into account our thuggishness and geopolitics.

Thanks for reading I hope more of my work can be seen here. I will always enjoy a good debate.

. I would hope that citizens want to be informed and are led astray a lot but lunatics on the television and in their newspapers. I understand it can all go wrong, but it is one part I would not claim as everything.

“When you dig into the details all of Picken’s plans have one single purpose.

They are designed to take money from your pocket and put it into his. ”

I took a lot of heat when I called it Picken’s scam four years ago. Gosh you need transmission lines to get electricity to market and approval of the state PUC to sell power? Just why would any one in the world be skeptical of the integrity of Texas oil men?

“We are not China, nor would we commit a command form of government policy if done right. ”

That is right Andrew but I suspect that you neither understand China or making electricity in the US. It is a common mistake to not be precise when discussions of transportation energy and electric power.

China is 50 years behind the US. We have the CAA, CWA, NEPA, and FERC just to name a few of the hurdles for building a power project. Yes, you need an EIS to build a nuke plant but you also need it for a wind farm. Some might see excessive regulation as going backward but China now has the air quality issues of South Bend in the 60s. The debate might take a few years but the opportunity for citizens to say ‘not there stupid’ also requires utilities to listen and explain why a project is not stupid and benefits the public.

“I took a lot of heat when I called it Picken’s scam four years ago. Gosh you need transmission lines to get electricity to market and approval of the state PUC to sell power? Just why would any one in the world be skeptical of the integrity of Texas oil men?”

Yes.

Whenever Pickens wanted to lease land for windmills, there was the usual stipulation from Pickens that he would also control the water rights. As everyone knows, water is becoming an increasingly scarce commodity and Pickens wanted control of the Edwards Aquifer.

Pickens plainly said he wanted to make money off any natural gas “boom”.
(Look at his investments in natural gas companies.)

What Pickens didn’t say was that he wanted to control every-ones water rights through his wind farm leases.

I would agree with that statement of not being completely knowledgeable about the situation as a whole that is for sure. But saying anything is 50 years behind I think is also a gross overestimate. More or less I want the discussion to happen. If you like and I would find it helpful, send me an e-mail with information on the subject. I will be sure to include it as I write more articles.

So taxpayers should compelled to pay the for infrastructure and manufacturing development, not the consumers of energy. Who does Mr. Smolski think the consumers are? The problem is governments borrow first then taxpayers refuse to be taxed more. At least if consumers are required to pay more for the high cost, high risk energy it does get paid for.

“But saying anything is 50 years behind I think is also a gross overestimate.”

Does it matter? The current infatuation with China by journalist is an indication that they do not understand or practice leadership. Let us start with the value of human life in the context of producing energy.

Until recently China has killed 100 times the coal miners compared to how we have been doing mine safety in the US for more than 50 years. Now China is only 10 times worse that the US when it comes to coal.

It just seems odd to focus very small increases in wind and solar in China while ignoring huge increases in coal.

I will put it in easy terms to understand. Andrew I am going to give you a choice for writing an article, I can pay you with a boring check for a large sum of money or I can give you a shiny new dime that you can immediately spend on penny candy. Do understand the importance of scale.

Finally Andrew why have you not focused on the great story of renewable energy in the US? It starts with Governor Bush in Texas in 98. You apparently failed to read the NATIONAL ENERGY POLICY. May 2001.

The US now has a sustainable program for increasing wind capacity. There are always expectations about doubling growth every year. First a 1000 MWe, then 2000 MWe, 5000 MWe, and finally 10,000 MWe of new capacity. At some point the curve turns and flattens out. So we only built 8,000 MWe, that is very good. Who cares what China did?

Not just wind but biomass, solar, and geothermal projects are going up all around the country. Thanks to federal PTC and state RPS we do have a domestic renewable energy that is working but under reported.

Rather than praise China, Spain, or Germany; how about Iowa? If Germany or Spain is doing something that works great. If Iowa is doing something that works, the lessons are more likely to help Minnesota.

One, Kit P, I have written on China getting around 70% of their energy from coal, taking one article as the basis of all my thought is quite close-minded but fine. As well, you are going back to 2001, my information is from 2011 (Report Citation REN21. 2011. Renewables 2011 Global Status Report) on who is the leader, whose program is operating correctly and so forth. Please if you wish to castigate show evidence that is all I ask, and definitely do not point to a failed oil entrepreneur as the one putting forth a program. I do not mind being wrong, that is human, but I do get quite annoyed with people who running around think they hold absolute truth. That to me is the worst act.

On the note of taxpayers, actually all polls show that the majority of the population would accept an increase in taxes if that meant all increasing taxes on the top 20% and closing tax loopholes. The US has not always been a debtor nation, ask Reagan why we are a debtor nation. It is taking one side of the argument, a consumer just as stating we spend to much while not wanting to talk about why we do not take in enough revenue.

As I have said before and wish to reiterate, if you want a good discussion e-mail, but if you want to just say things keep commenting without putting forth any evidence on the matter.

One last thing, the 211 billion is not in reference to China only, but worldwide investment in renewable energy.

O and one last thing, I do not have an infatuation with China, the article is about being better than them, which I believe we can be. And if I have my money on anyone it is Brazil and Latin America to pull ahead of everyone.

I can go back to the early 70s if you like. Power plants are built for 40-60 years. Journalism majors should be sent over to engineering building to check their facts.

“my information is from 2011 (Report Citation REN21. ”

Not a very good report, very shallow. Did hammer it pretty hard on this.

“Please if you wish to castigate show evidence that is all I ask ”

If you would like to pay me for reviewing your work, contact my company. I get paid to make sure all the ‘evidence’ going to the regulator is traceable and traceable. Years after I am dead, someone may need to pick up a calculation and follow though it.

In the context of being a better journalist let me suggest that you actually ‘show evidence’. Providing links is clear flag that someone is not trying to BS me or is actually knowledgeable enough for me to continue reading. I recall a statement attribute Bush in a British rag. It was repeated many times by journalists as fact. It took me less than five minutes to find the ‘secret’ report on the internet. The quote was taken out of context and Bush had nothing to do with it.

Let me also point out much of the information that comes out of China is out right communist propaganda.

“but I do get quite annoyed with people who running around think they hold absolute truth. ”

Well Andrew we mush have different standards. If you do not know something is true then maybe you should not be writing or saying it. Rather than be annoyed you might consider how ‘know’ something is true.

At $2.47/gallon equivalent and an average of 33 mpg, my Civic GX is $.075/mile (Northern California). Vehicle affordability and availibility could be better – the natural gas version is $7k more than the gasoline Civic LX (same trim level). Prices are higher right now since CA hybrid drivers lost HOV lane access at the end of June. Many parts of the world have cheap natural gas vehicles, so this should be fixable without difficult engineering required for breakthroughs in any biofuel. a 200 mile range isn’t enough for road trips, but certainly enough for commuting. I don’t find fueling more difficult than gasoline.

Even natural gas is a bridge – what I read at http://www.theoildrum.com/node/8212#more and other places doesn’t make me think natural gas really has hundreds of years of cost-effective supply. But at least it helps spread out the transportation fuel needs from liquid fuels alone.

Hamilton never talked about subsidies in the sense that Smolsky is mentioning. He just promoted tariffs, which would not guarantee anyone’s startup losses. Tariffs would improve the industrial production of the United States if they work as intended. They will provide badly needed revenue to improve this country’s credit rating if they don’t work as well as intended.

Hamilton never talked about subsidies in the sense that Smolsky is mentioning. He just promoted tariffs, which would not guarantee anyone’s startup losses. Tariffs would improve the industrial production of the United States if they work as intended. They will provide badly needed revenue to improve this country’s credit rating if they don’t work as well as intended.

That is the sort of approach I favor as well. It improves the prospects for alternatives as a whole without picking technology winners — and as you say provides badly needed revenue.

Arrgh! I really do understand how people in California get sucked into a destructive life style. Odd enough many in the live close to work with affordable housing, low taxes, no crime, and good schools. Next time you are stuck the freeway drunyon, tell me about the promised land.

“Even natural gas is a bridge ”

Why do people say such silly things? How long do these people expect to live? Debating silly solutions while ignoring the easy solutions.

Terry McAuliffe, chief of GreenTech Automotive in McLean, (VA) is in China this weekend, announcing a venture with Shengyang Zhongrui Investment. A plant in Inner Mongolia will have the capacity to build 300,000 cars per year with components made by GreenTech. McAuliffe was chairman of the Democratic National Committee. Many believe he is gearing up for another campaign for governor of Virginia.

Said McAuliffe, “We are building electric and hybrid automobiles that are being sold around the world. The company’s motto is: “It’s not green unless it is affordably green.” We have one plant in operation now in Mississippi and another under construction in Tunica, Miss., an area with tremendously high unemployment.”
————————————————————————————————
I hope this is for real and not just “vaporware”. If interested in the rest of the story, it’s at EV World under “Green Tech Plans for MYCar Production.”

It was on a Friday night, about the middle of Feb, when I drove down to the Casinos. The parking lots were jam-packed. Maybe, ten minutes later I found a space out by the edge of the road.

Rufus~

Casinos are most packed when the economy is the worst. The people who most go to casinos are the mathematically illiterate who have no other hope, than the infinitesimal chance of a lucky strike which Big Gaming and your state’s government has falsely marketed to them as almost a sure thing.

And why were you driving to the casino? What kind of message does that send? People in a temperate part of the U.S. such as Tunica County should be riding bicycles.

Two weeks later, on a Friday night, the first week of March, I drove out. The Parking lots were half empty.

Obviously a sign that the people of Tunica County are either getting smarter about the laws of probability, or they see other, better ways to make money.

You make any progress yet getting those casinos to install rooftop solar panels and wind turbines?

The idea that the oil companies are actually owned by investors is such a laughable and stupid idea that it’s not even worth discussing. The Oil companies are controlled by Management and Majority Shareholders, who routinely elect their hand picked….. Board of Directors

Because manufacturing is cheaper overseas this suits the Mercantile and Managerial Class and Super Rich just fine.

Ownership of a certain percentage of the stock does not equate into “voting rights”

Um, yes it does. One share conveys the right to vote. That’s how the system works. If I own a share of stock, I get to cast a vote on proposals. If I own enough shares — just over 50% — then I can essentially control the show as you say. But if you own shares of a stock, then you end up getting proxies all the time to vote on different issues.

Proof of the Pudding might be that back in April the “experts” were putting the first quarter at 1.9%, and I was blogging, “No way, the economy died in the last month of the quarter”. Now, they’ve revised their “expert” numbers down to 0.4%.

AAAhhhhh….. I see now. We have no ready answer, so we will make money in the stock market in the meantime.

Mac

Um, Mac, they are invested in all of these things. If you look at any publicly traded company in alternative energy, you will find that institutional investors also own the majority of their shares. In many cases, they may own ExxonMobil and First Solar.

The times are indeed a’changin’. If I’m not mistaken, a new wind turbine is the cheapest electricity you can install (if you’re in a windy area,) and Solar will soon be #2 (again, if you’re in the right area.)

You think that “proxy” votes will defeat the onslaught of money from people who are already basically in contol of “the company”

A truly amazing train of thought……………….

Mac, for several posts now you have been doing your thing of becoming more nonsensical with each post while drawing seemingly random conclusions. You said that owning a stock didn’t convery voting rights. That was wrong, and I corrected it. What you haven’t shown is that any particular publicly traded oil company is basically being controlled by a group of people, nor have I argued anything about proxy votes other than the fact that owning stock allows one to vote.

You “believe in alternative energy, but not enough to invest in it.”

Amazing………………..

What is amazing is that things get so twisted inside your head that you actually write stuff like that. What on earth would lead you to believe that I don’t invest in alternative energy? I am simply bewildered as to how you manage to come to the conclusions you do. Further, the single biggest investment I have is in my job — which is in alternative energy.

Is this article a joke?
If so, it’s pretty funny. If not, RR, I hope that you don’t agree with the view points of this naive writer (Andrew Smolski.) It appears that he has never taken a class in economics.

Andrew, have you heard of the paradox of the broken window? You don’t get net jobs by breaking windows. Sure, there’s a job for the window maker, but that money could have been invested into growing the business, which would mean the creation of a lot of jobs if the money is invested into a project with a large return on investment.
In summary:
a) There is no value in a product being renewable
b) Building expensive power plants will not create jobs. It just takes capital that would have gone into other projects that potentially can yield higher returns.
This means that building expensive renewable energy power plants will be a net drain on the economy and will cause net job loss.

RR, I seriously hope that you were joking when allowed this article to be posted to your website.
You make a lot of comments about the poor economics of various cellulosic ethanol power plants. An article like this (even though you didn’t write it) could and might destroy any credibility you have in the field.
When I see this I think: “How can you argue that cellulosic ethanol is a bunch of hype, and then allow somebody to write a post arguing that the more money we waste on an energy project, the better.”

Yes, Robert O’Neil, Andrew did not do a very good job of explaining renewable energy but Robert O’Neil you are flat out wrong.

“You don’t get net jobs by breaking windows.”

Renewable energy projects are not broken window the produce energy that has value. Most old renewable energy projects produce power cheaper that NG fired projects because NG is not as cheap as it was when the NG fired power plant was built. The fallacy of Robert O’Neil’s argument is that power plants are built to last a long time and no one has been very good at predicting what that cost of fuel be over a long time.

“the money is invested into a project with a large return on investment. ”

What world does Robert O’Neil live in? Energy is a basic human need. To prevent scum bags from ripping off people to earn ‘a large return on investment’ by limiting the supply, energy production is a heavily regulated industry. Energy companies are allowed a fair return on investment in return for meeting the needs of society.

The is especially true when comes to making electricity. If there is a problem with renewable energy job creation it is that the politicians do not consult with engineers about how to create the jobs. Offshore wind would be great in California where the generating costs are high but the actual jobs to supply wind power to California are created in the PNW where generating cost are low.

“Building expensive power plants will not create jobs. ”

It does create jobs, lots of jobs. All power plants are expensive. We need new power plants to replace old inefficient plants. The primary difference between fossil and other sources of electricity is the number of long term jobs. It does not take many to run a NG plant but gathering NG requires a whole infrastructure of its own.

RR, I seriously hope that you were joking when allowed this article to be posted to your website.

Mac’s answer to you was spot-on. I often allow guest essays that are sometimes at direct odds to my position because I think debate and discussion is good. I have caveated so many of these guest essays, that readers know that publication does not imply endorsement, so I no longer caveat them. I put them up if I think the subject is worth discussing. Sometimes it is even a way for the author of the article to learn something new; I have had several tell me that the took away new information from the comments.

Any comment to save your reputation?

If putting up something that seems contrary to my beliefs is all it takes to destroy my reputation, then I presume it was destroyed long ago.

I applaud RR for running a variety of viewpoints. Echo chambers and group-think are not the way to better understanding of issues.

I also disagreed with the op-ed. However, it was intelligently written and dealt with real issues.

Sometimes I even disagree with Robert Rapier. So what? It is always rewarding to read his views.

BTW, RR, still lots of gasoline out there, as we get into our third summer following the season when you ruminated that cross-country driving might become a undertaking of the past, due to gasoline shortages.

Unless we find massive deposits of oil in the near immediate future, there is no way oil production can keep up with the demand of 400-500 million additional vehicles from China, India, S. America, Indonesia, etc.

Yeah, I just saw that on the energy ticker. The law goes away on Dec 31, anyway, but I’m afraid the only thing that got killed was cellulosic ethanol. I don’t think Poet, Dupont, or Abengoa will start building until something such as was in this bill is in place.

You’ll notice that GDP didn’t quite get back to the level of Dec, 2007, when high gasoline prices knocked it back down again. I have a hunch that GDP will, after falling, rise back to a level a bit short of this one before the next round of gasoline price increases flattens it again.

Is it Nate Hagens that equates it to looking down a staircase? Not exactly the way I’d draw the picture, but close enough.

The U.S. Economy slid onto the edge of recession around the first of March. What happened around the first of March? Gasoline Prices climbed above $3.25/gal.

Now, with the Economy almost certainly In recession, and the U.S. and the rest of the IEA pumping a Million barrels of Crude, and Products onto the market “Daily,” wholesale gasoline prices are still at a level that translates to $3.50/Gal.

What happens in 4, or 5 weeks when that Million Barrels from the U.S. and the IEA go away? Well, in case you haven’t figured it out, we’re going to go just about as deep into recession as we went last time.

By the time gas prices get low enough that we start to crawl out of this one, our deficit will be larger, still, and we’ll be looking back longingly to the days when we had a AA+ (with negative outlook) Credit Rating.

You’ll notice that GDP didn’t quite get back to the level of Dec, 2007, when high gasoline prices knocked it back down again. I have a hunch that GDP will, after falling, rise back to a level a bit short of this one before the next round of gasoline price increases flattens it again.

Is it Nate Hagens that equates it to looking down a staircase? Not exactly the way I’d draw the picture, but close enough.

Have you been peeking over my shoulder? Last night and this morning I wrote a column on this very topic. I even sent a note to Nate last night just to make sure one of my layman’s explanations was clear enough.

It was on a Friday night, about the middle of Feb, when I drove down to the Casinos. The parking lots were jam-packed. Maybe, ten minutes later I found a space out by the edge of the road.

Two weeks later, on a friday night, the first week of March, I drove out. The Parking lots were half empty. One pass-through, and I parked next to the Casino entrance. That was Before the Floods, Before Fukushima, Before Anything. It was like someone turned off the spigot.

That was the period when gasoline prices blasted through $3.25 heading for $3.50. That was the ONLY thing of any note that happened during that time.

I have seen Not One Politician; Not One “Economist”/Commentator on CNBC, or Fox. Not One living Human Being state the obvious – This Economy Can Not Stand Gasoline Prices Over $3.50. Maybe, not even over $3.25.

Our bottom 40%, or so, just are Not set up to stand the strain. Joe, and Jane Jones, after spending $350.00/mo on gasoline, and paying their rent, food, clothes, healthcare,Car Payment, Insurance, and children’s expenses just don’t have anything left.

Walmart, where middle America shops, came out about that time, and said, at the end of the month our stores are empty. Last month, Family Dollar said, “yep, we’re, now, in the same boat. Our folks are busted.”

The unemployment rate ticked down 0.1% last month, because 193,000 Left the Labor Force. They gave up.

I have seen Not One Politician; Not One “Economist”/Commentator on CNBC, or Fox. Not One living Human Being state the obvious – This Economy Can Not Stand Gasoline Prices Over $3.50. Maybe, not even over $3.25.

The real problem though is that this time is different than times past. In times past oil production expanded, and the new production kept prices in check. But if we can’t stand gasoline at $3.50, but lots of other countries whose economies are much less dependent upon oil will gladly pay for it at those prices, then we are truly in a bind in the years ahead.

It’s true; India, China, Korea, Indonesia, Malaysia, Saudi Arabia, the other ME Countries, some of the African Countries, the South American countries are All going to use more oil next year than this year.

Meantime, the IEA is out of the game in a little over a month, and there’s nothing on the horizon that would lead one to believe that production, much less exports, will be up in 2012.

Meantime, the genii that we bailed out at GM, and Chrysler took advantage of a slightly accelerating economy, and lower gas prices in 2010 to ramp back up the production of 110 gazillion horsepower pickemup trucks that can pass everything but a gas station.

And, so, we’re back to the same point on the circle. Only by going into a recession So Deep that we manage to bring the entire rest of the world into recession with us do we have any chance of seeing gas prices go low enough for us to come crawling out.

We’ve already seen that India, and China will pop back up quicker than we will, which means we fall back well before we even get to the level of GDP/Employment that we are now.

Back to the descending staircase.

I honestly think that anybody that isn’t sick to their stomach just doesn’t understand the whole picture.

Hell, that’s why I support “cellulosic” so much. I’m not sure we can make it work, but I’m Damned sure we’ve gotta try something; and try it PDQ.

And, of course, the car companies can build much more fuel efficient automobiles (and some do.) However, the lower 40% that are really getting hammered buy “used” cars. Only after the upper 60% start buying the more efficient cars, and only after they’ve driven those cars the obligatory 5, or 6 years will most of those cars start to filter down to the ones that really, really need them.

That whole process could take awhile.

Here’s my thnking: If we could get large quantities of E85 on the market, relatively quickly, at a retail price in the $3.00 to $3.25 range, AND a whole slew of CHEAP cars and trucks that get an average of 30 to 35 mpg on E85 that would allow the bottom 40% of our population to get back into the $0.10/mile range fairly soon.

We’ve seen that these people can percolate along pretty good at $0.10/mile. It’s the best shot I can conjure up; and, it’s looking like a pretty long shot, especially from a Political Standpoint, right now.

Yes. State-run lotteries are nothing more than a hidden tax on the mathematically illiterate, as are state-franchised casinos that give a portion of their winnings to the state. Have you ever heard of a casino that doesn’t win?

Casinos like to say “Gamble responsibly.” and “We provide entertainment.” but they actually pre on the mathematically illiterate whom they seduce into thinking gambling is the easy road to riches. If your state is like mine, watch closely the ads for the state-run lottery. They say nothing about the slim chance of winning, but instead show some (of the rare and few) happy winners.

And I still maintain the worse the economy, the more crowded the casinos (and their parking lots).

The parking lot of the Tunica Casinos is just about the most coinkydink indicator I know.

Is that what makes Tunica County attractive for that new electric car company that wants to put a plant there? Do you have the educated and technically-savvy work force that can provide the workers that plant will need?

You don’t know your ass from a hole in the ground about casinos, Wendell. Casinos do well when the economy is doing well. They do poorly when the economy is doing poorly.

As for that car deal, it’s the first I’ve heard of it. As I said, I’ll wait and see.

As for our workforce: Don’t be a dick. Our workforce keeps all those Fedex planes in the air, and doesn’t seem to have any problem building Toyotas, and Nissans; I guess it can build those little toy cars.

I’d put the odds on that factory ever being built at about one in a hundred. Every one of those little toy car manufacturers has gone bankrupt.

Wendell, Tunica Co. is approx. 25 mi south of the Airport, Fed Express World Hdqtrs., Sharp Electronics, and on, and on. Besides, how many people do you think we have employed in 9 casinos, 3 shifts, working on Electronic gaming devices, and advanced surveillance, maintenance of complex systems, etc?

Hmmm, I thought they were more like the days of the riverboat gamblers when steamboats went up and down the Mississippi. No high-tech then, just card sharps with marked cards and aces up their sleeves, loaded roulette wheels, and pretty girls luring marks to the fan-tan table.

So your casinos are pretty high-tech, but still not interest in putting solar panels on their roofs — just interested in taking money from people who don’t realize the house always wins, and giving a cut of the profits to the state government in Jackson.